Universal health insurance will be toxic for Ireland

Sunday Business Post (comment and analysis) 1st June 2014

By Louise O’Donnell, national secretary of IMPACT’s health and welfare division, IMPACT trade union.

Along with the medical card fiasco, anger at the cost of property taxes and water charges was the main driver of the electorate’s punishment of Government parties on 23rd May. Yet, despite talk of ‘listening to the electorate’ and ‘learning the lessons,’ the coalition is sleep-walking into an even bigger maelstrom in the form of proposed universal health insurance (UHI).

Sometime between now and the general election, the health minister is to reveal the average cost of UHI. Already Mr Reilly has estimated it at over €900 per person each year – well above the combined average cost demanded of households (not individuals) in water and property charges. There has been no indication that children will be exempt, so a couple with two children living at home can expect to pay €3,600 each year.

Given the stakes, the UHI proposal has received surprisingly little detailed scrutiny either in the media or in political circles. It’s astounding that Labour backbenchers aren’t already terrified after the experience of this month’s elections, and in view of the constituency that’s set to be hammered most by the cost of UHI.

According to RTÉ’s exit poll, 55% of voters in the local and Euro elections were influenced by water charges, expected to average €240 per household. Only slightly fewer voters were influenced by the property tax which, for most households, currently costs between €300 and €500 a year. 

One wonders how the minister and his colleagues expect voters to react when these outgoings are dwarfed by compulsory medical insurance bills which, incidentally, will come on top of the taxes and universal social charge that currently fund our health service.

When James Reilly boasts that UHI can be introduced at no additional cost to the exchequer, he means that the extra revenue will be raised through individual insurance payments. By far the biggest burden will fall on individuals and families who do not currently have private health insurance, and who don’t qualify for medical cards. It’s safe to assume that most people in this category – which could be said to typify the so-called ‘squeezed middle’ – simply cannot afford private health insurance. Yet they will now be compelled by law to pay.

Even if the seemingly optimistic official price estimate of €920 per individual is correct, it will place an impossible financial burden on families and individuals. What’s more, the experience in other countries that have adopted similar UHI models has been a continuing rise in the price of compulsory insurance, coupled with increasing restrictions on the health services covered.

An equally troubling flaw in the minister’s approach is the fact that we don’t yet know what services and procedures will be covered by the basic package of compulsory insurance. The only firm commitment so far is that there will be a single queue for treatment, although UHI does not herald the end of the two-tier health service as originally claimed because you will be able to buy better cover if you can afford it.

The White Paper promises a commission to make recommendations on what should be included in the ‘health basket’ that basic cover will buy. By thus kicking this central question into touch, the minister and his department can remain largely silent on what services are likely to be excluded.

If I suffer a stroke and attend A&E, it’s likely that the current €100 charge will still apply. Hopefully my hospital treatment will be covered, so long as I don’t opt for the “luxurious accommodation” (whatever that means) described by the department.

But what about the speech therapy, occupational therapy and medication that I’m almost certain to need once I’m discharged? Are these covered by compulsory insurance? Or will they be defined as ‘add-ons’ that I’ll have to find additional money for?

It’s also doubtful whether a population of five million can support enough ‘competing’ insurers to make the minister’s chosen funding model viable, or have any chance of keeping the cost of premiums under control. And, if insurers go bust, cash-strapped policyholders or hard-pushed taxpayers could end up paying again.

There are so many unanswered questions that, in IMPACT’s recent submission to the admittedly-weak consultation process on the White Paper, we called on the Government not to proceed with the implementation of UHI until the likely cost to individuals and families is assessed, publicised and understood. We also called for more clarity – including over costing – on what services and procedures will be covered by the basic package, and said safeguards should be put in place to provide cover, at no additional cost, if a private insurer fails.

But the fundamental problem is that these issues can’t be overcome if the minister insists on the particular funding model he has chosen for UHI in Ireland. The ‘competing insurers’ model set out in the White Paper is deeply flawed and totally inappropriate to Ireland’s geography, its underfunded health service, and the current precarious state of our family finances.

It is largely based on the system adopted in the Netherlands where, despite additional investment that’s been ruled out in Ireland, it has resulted in an inefficient funding system, different tiers of entitlement, steadily increasing premiums and rising hospital deficits. The Dutch have also experienced higher hospital re-admission rates because the model creates financial incentives to discharge patients too early.

If the consultation over the White Paper was real, it would consider the merits of other approaches to universal health cover like those adopted in France, Germany and the Nordic countries. The single-payer social insurance systems adopted in these countries are providing equality of access to what, by Irish standards, are high quality, well-funded and efficient health services.

This is what people imagine when they call for an end to the two-tier health service. It’s the opposite of the expensive, unfair and unpopular fiasco that’s likely to result from minister Reilly’s proposals. Coalition ministers and TDs would be doing the nation – and themselves – a service if they copped on to this before it’s too late.